How Have You Handled Finances Working Overseas???Advice Pls!

[DareDevil]

Just looking to see how some of you have handled your finances while working abroad.

Retirement and Savings Plans, house payments (rentals), income taxes, student loans payments, bringing money back to Canada.....trying to figure out the ins and outs on the BEST way to handle these particular items with little hassle.

Situation : Inquiring to head overseas for a well paying, no tax captain position. Own a house, have flight training loans of course that require a monthly payment.......I know abit from being over there before (copilot wages) but now I am dealing with significantly more money.


Would appreciate all the advice possible from the seasoned veterans who know what their are talking about.

[yycflyguy]

To become a non-resident for taxation purposes you have to severe most of your ties to Canada. There is a minimum amount of time you must be out of the country to qualify. Call CRA and ask them the details. I was allowed a Canadian bank account and a credit card. Set up automatic payments for your loans with your bank. If the contract is for less than a year you will be subject to Canadian tax. Some countries have reciprocal tax treaties.

Advice; set up a bank account with a stable bank in whatever country you will be. Pump your salary money there and transfer it back to Canada as you need it. You can bring back cash but whatever amount over $10,000 you will have to declare. Not illegal but will trigger more questions by Customs.

Where is the contract? Perhaps I can give more advice if I know the exact country you are dealing with.

[Canuck223]

What some individuals have done working for other employment sectors is this.

They set up a numbered corporation in Dubai. Paychecks are made payable to the corporation. The corporation pays the person a base salary that's reported to Revenue Canada. If and when the contract ends, remaining funds can be tapped as salary or as a loan.

[North Shore]

Go and consult a decent tax lawyer or accountant with experience in this area. It'll cost you up front, but the advice that you get will probably be better than the free advice that you'll get on a board frequented by aviation experts..

[Alpha Crit]

I spent 4 years in the Middle East. Established myself as a non-resident of Canada, and didn't have to pay any income tax on foreign earned income during that period (the country I was residing in had no income tax). I did have to pay a flat rate 25% tax on my Canadian earned income (I have a Canadian Forces pension). Basically, you have to sever most ties with Canada, and clearly establish residency somewhere else. I turned in my driver's license, medical cards, unjoined all clubs I was involved in. Sold all possessions I couldn't take with me. Moved my family. I kept my house, and rented it out at arms length, that is to say, put it under control of a professional management company. You don't want any family members staying in your house, as that is not deemed arms length. Kept my Canadian bank account, RRSP's, etc.

Bringing your money back into the country afterwards is no problem ... you will not have to pay a whack of tax on it. You will, obviously, have to pay tax on any interest it earns once you have re-established residency back in Canada.

Overall, it was a good experience, and I'm definitely better off financially for having done it. Good luck!

[trey kule]

Boy did North Shore give you good advice..Take it.. Some of the info on here, I know to be totally wrong. There is things like overseas tax credits, and some countries have pension/medical plans. Canadina correspondent banks are pretty much everywhere.

Pm me and tell me where you plan to go and I might be able to share some of my experiences if I have worked there.

[Expat]

Good chance to buy overseas property...

[trey kule]

I heard that too..about the overseas property . Afganistan I believe. Nice house and compound with a flower garden to die for.

Actually, I got to thinking about the original post, and it occured to me that almost all the companies I have worked overseas for provided me with an orientation package covering such issues as mentioned. And the exceptions are pretty much those I would never go back to work for.

[DareDevil]

Heading to Maldives .... I'm very aware of the good, the bad and the ugly. Just looking for financial advice.

For everyone who's posted...I really appreciate the info! Looking forward more details!

Cheers

[Panama Jack]

There is some really good advice given here by people who have evidently done it. Consulting with a tax lawyer is money very well spent to protect you from unpleasant surprises later on and also gives peace of mind.

As far as RRSP's, I haven't contributed in years and it seems like my RRSP keeps putting along, albeit with less than stunning performance. I have contemplated pulling the plug on it and cashing out, but have not decided because I tend to be a little bit lazy.

Being overseas allows for some really unique investment opportunities-- I ply most of my savings into funds managed by Zurich Financial Services, mutual-fund stuff at risk/reward levels that I like. The advantage here is that you are not limited to a certain percentage of investment being in Canadian funds (Asia and other places are where the good return possibilities are) and of course, tax free growth. Because it is a Global Company, I can find representatives pretty much anywhere I might move to. It is questionable whether I will ever return to Canada once I stop working, so I don't have to worry about Canadian Income Tax when the money is withdrawn. Also have a Isle of Man bank account-like setup which is paying me an interest rate of something in the area of over 10%. That certainly is more attractive than Bank of Montreal or even President's Choice Financial. Credit Cards, Drivers Licences, etc., I have the local ones. Makes payment easy.

http://www.zurich.com/main/home/welcome.htm

[Lost Lake]

It is very difficult to move money from the dives. You could open a bank account with MBNA, but you can not remove it except by daily debit card amounts when you return to Canada. You will have to figure out where to hide your cash in your room during your wonderful 3 month sentence. The good news is you will be able to bring most of it back to Canada since you can't spend it on booze.
Sorry, not trying to trash the thread. Best asdvise is to consult an overseas tax expert. There are no credits avialable, so you either declare your income, pay tax, get a CPP or hide the money'

Good luck and enjoy. If you're smart, you won't be there long enough to worry about it!